Mulhern's Waste Oil Removal Pty Ltd v Circelli - [2009] SASC 353

SUPREME COURT OF SOUTH AUSTRALIA
(Appeals to a Single Judge: Criminal)
MULHERN'S WASTE OIL REMOVAL PTY LTD v CIRCELLI
[2009] SASC 353
Judgment of The Honourable Justice Gray
20 November 2009
ENVIRONMENT AND PLANNING - POLLUTION - WASTE DISPOSAL - OFFENCES - PENALTY
CRIMINAL LAW - SENTENCE - RELEVANT FACTORS - TOTALITY - GENERAL PRINCIPLES
Appeal from orders of Judge of Environmental Resources and Development Court of South Australia - appellant charged with 10 offences under Environmental Protection Act 1993 (SA) - penalty of $200,000.00 imposed in respect of three offences - penalty of $260,000.00 imposed in respect of seven offences - whether penalties manifestly excessive - whether double punishment in respect of same misconduct - whether adequate weight given to matters in mitigation - consideration of principle of totality.
Held: appellant's cooperation with EPA and its financial expenditure represented significant factors in mitigation - appellant punished twice in respect of same conduct - penalty manifestly excessive - penalty reconsidered - penalty of $75,000.00 fixed in respect of three offences - penalty of $70,000.00 fixed in respect of seven offences.
Environment Protection Act 1993 (SA) s 132; Summary Procedures Act 1921 (SA); Environment, Resources and Development Court Act 1993 (SA) s 7(3) and s 7(3)(a); Criminal Law (Sentencing) Act 1988 (SA) s 18A, referred to.
Resourceco Pty Ltd v Harvey (2007) 96 SASR 495; Circelli v Mulhern's Waste Oil Removal P/L [2009] SAERDC 17; Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683; Pearce v The Queen (1998) 194 CLR 610, considered.

MULHERN'S WASTE OIL REMOVAL PTY LTD v CIRCELLI
[2009] SASC 353
Civil
GRAY J.

Before the Court is an appeal by Mulhern’s Waste Oil Removal Pty Ltd from a decision of a Judge of the Environment Resources and Development Court of South Australia.
Mulhern’s Waste Oil Removal carries on a business as a collector of waste oils. Generally, the oils are collected from a customer’s premises and are then taken either to one of the defendant’s two premises or elsewhere for treatment. The customer pays a fee to Mulherns for the collection service. Mulherns on-sells the treated used oil.
The orders the subject of this appeal were made in proceedings in which Mulherns was charged with 10 offences against the provisions of the Environment Protection Act 1993 (SA). Three of the 10 offences related to events occurring on 26 July 2007. The remaining related to ongoing offending from January 2007 to July 2007. The Judge imposed two monetary penalties, one in respect of the three offences, of $200,000.00 and the other in respect of the remaining seven offences, of $260,000.00. The Judge further ordered that Mulherns pay the costs of the prosecution, fixed at $800.00.
Mulherns has appealed against the penalties imposed. It was said that the penalty identified by the Judge in respect of each offence was manifestly excessive and that each of the penalties ultimately imposed in respect of the two groups of offending were also manifestly excessive. It was further contended that the Judge erred in the application of sentencing principles as follows: that Mulherns was punished twice in respect of the same misconduct; that there was inadequate weight given to matters in mitigation; and that proper regard was not paid to the principle of totality.
Environment Protection Act – Criminal Proceedings
The offences against the Environment Protection Act are within the criminal jurisdiction of the Environment Court.[1] That Court deals with such offences as summary offences and in accordance with the procedures set out in the Summary Procedures Act 1921 (SA).[2] These issues were discussed by Debelle J in Resourceco Pty Ltd v Harvey:[3]
[1]    Environment Protection Act 1993 (SA) section 132.
[2]    Environment, Resources and Development Court Act 1993 (SA) sections 7(3) and 7(3)(a).
[3]    Resourceco Pty Ltd v Harvey (2007) 96 SASR 495 at [33] - [35].
The respondent relied on the terms of s 30(1) of the Environment, Resources and Development Court Act and in particular on para (e). Section 30(1) and (2) are in these terms:
(1)     Subject to this section and to any provision in a relevant Act as to appeals against a decision or order of the Court in the exercise of a jurisdiction conferred by that Act, an appeal lies --
(a)in the case of an interlocutory order made by the Court -- to the Supreme Court constituted of a single Judge;
(b)in the case of a decision or order given or made by one or more commissioners (not being a decision or order of a full bench) -- to the Supreme Court constituted of a single Judge;
(c)in the case of a decision or order given or made by a magistrate -- to the Supreme Court constituted of a single Judge;
(d)in the case of a decision or order given or made by a Master or a registrar -- to the Supreme Court constituted of a single Judge;
(e)    in any other case -- to the Full Court of the Supreme Court.
(2)     An appeal lies as of right on a question of law and with permission on a question of fact (but this principle may be displaced or modified by the provisions of the relevant Act under which the jurisdiction is conferred).
If s 30(1) and (2) were the only provisions which were relevant, this appeal would have been listed for hearing before the Full Court because the appeal would have fallen under s 30(1)(e). However, it is necessary to have regard also to the terms of s 30(4) of the Act. Section 30(3) is irrelevant for present purposes. Section 30(4) provides:
(4)     A party to any criminal proceedings before the Court may appeal against any judgment given in those proceedings in the same way, and to the same extent, as an appeal may be instituted against a judgment given in a criminal action under the Magistrates Court Act 1991.
The words "in the same way, and to the same extent" signify that the appeal lies to a single judge of this Court. There are a number of routes to that conclusion.
Section 30(1) and (4) prescribe to which court an appeal will lie. Section 30(4) refers to appeals in criminal proceedings while s 30(1) refers to appeals in all other matters. The Full Court is not a court to which an appeal will lie against a judgment given in a criminal action under the Magistrates Court Act 1991 (SA). The court in which such appeals are instituted is the Supreme Court constituted by a single judge. An appeal will thereafter lie to the Full Court but only if permission to appeal is given. In addition, when s 30(4) says that a party may institute an appeal in the same way as an appeal instituted against a judgment given in a criminal action under the Magistrates Court Act, it is stating that the appeal lies to this Court constituted by a single judge. The expression is not intended to be anything other than a provision identifying the court which will hear the appeal just as s 30(1) does for all other proceedings in the Environment Court. Had Parliament intended that all appeals in criminal proceedings should lie to the Full Court, it could easily have said so. Alternatively, it could have omitted s 30(4).
Furthermore, when s 30(4) speaks of an appeal being instituted "to the same extent" as an appeal against a judgment in a criminal action under the Magistrates Court Act, it means that the appeal lies on both questions of law and questions of fact. Section 30(2) which provides for appeals in other matters limits the appeal to questions of law and appeals on questions of fact may be made only by permission of the court. It applies only to appeals in matters other than criminal proceedings in the Environment Court. In short, s 30(4) applies to appeals in criminal proceedings before the Environment Court and s 30(1) and (2) applies to appeals in all other proceedings in that Court.
Both parties to this appeal accepted the correctness of this authority.
In Resourceco, Debelle J also made the following pertinent observations with respect to the objects of the Environment Protection Act:[4]
In a number of decisions, the Environment Court has set out the objects of the Environment Protection Act and the obligations imposed upon a person who is permitted by a licence to engage in activities which have a potential to cause pollution or which in fact cause pollution to a greater or lesser degree. The Act calls these activities "prescribed activities of environmental significance". The Environment Court's remarks are to the following effect. I respectfully agree with them.
The objects of the Environment Protection Act are to promote the principles of ecologically sustainable development, to ensure that all reasonable and practicable measures are taken to protect, restore and enhance the quality of the environment having regard to those principles and, among other things, to prevent, reduce, minimise and, where practicable, eliminate harm to the environment. The structure of the Act is such that no person may undertake a prescribed activity of environmental significance unless authorised by a licence. The holder of a licence holds a special privilege in that that person can undertake a polluting activity. However, there is a responsibility attached to the privilege. The licence holder must comply with the conditions imposed on the licence. That responsibility is reflected in s 45(5) of the Act. See Harvey v Hamilton Wine Group Pty Ltd [2002] SAERDC 23; Harvey v Rural City of Murray Bridge [2004] SAERDC 32; Harvey v BRL Hardy Ltd [2003] SAERDC 57.
I respectfully adopt these observations.
[4] Resourceco Pty Ltd v Harvey (2007) 96 SASR 495 at [27] - [28].
The Offending on 26 July 2007
The first, eighth and ninth counts all arose out of the one incident on 26 July 2007. On that occasion, oil had been stored in a manacon tank for temporary purposes. The oil was to be stored there for a couple of days before being moved to a mega tank. At that time, the waste oil industry was suffering from an oversupply of waste oil and there was a tough climate in which to on-sell the used oil. This led to the need for temporary storage. Through the malicious act of a vandal or saboteur, the valves and camlocks on the tank were activated in such a way as to maximise the escape of oil. This involved some detailed knowledge of the operation of the valves and camlocks. The manacon tank was not surrounded by a bund, a device designed to contain escaping oil. As a consequence, pollution occurred through the escape of the oil. Mulherns undertook significant remedial work in the clean-up of this spill at a cost of $180,000.00. In addition to being unbunded, the manacon tank was not properly labelled.
The escape of oil was addressed in count one and the particulars provided thereto:
On 26 July 2007, at Largs Bay in the state of South Australia, the defendant by polluting the environment caused serious environmental harm.
Contrary to Section 79(2) of the Environment Protection Act 1993.
This is a minor indictable offence
Particulars
On 26 July 2007, the defendant was the occupier of Allotment 11, Elder Road, Largs Bay being the land comprised in Titles Register Certificate of Title, Crown Lease and Crown Record CT 5549/271 (“the premises”).
At all material times the defendant was the operator of a waste depot at the premises (“the business”).
The business involved a prescribed activity of environmental significance and the defendant was authorised by a licence issued under Part 6 of the Environment Protection Act 1993 (“the Act”) to conduct the business.
Prior to the 26 July 2007, the defendant caused waste oil to be stored in a tank located on the premises. The tank had an outlet pipe toward the bottom of the tank which was regulated by a ball valve, tap and camlock.
The tank was not surrounded by a ‘bund’, namely a structure surrounding the tank which acts as a physical barrier capable of containing the volume of liquid stored in the tank, should it be caused to be discharged from the tank, so as to prevent the discharge of the liquid off of the premises.
On 26 July 2007, persons unknown removed the valve mechanism from the tank, resulting in the discharge of approximately 10,000L of used oil from the tank.
The defendant failed to prevent the escape of pollutants, namely approximately 10,000L of used oil, onto land own [sic] by BP Australia Pty Ltd (“BP”).
BP did not consent to the escape of pollutants onto its land.
The escape of pollutants onto BP’s land created an environmental nuisance and resulted in loss exceeding $50,000.
It is to be noted that count one relied expressly on the lack of a bund and that allegation relevantly formed part of the first count. Although the particulars did not specifically make reference to the failure to mark the manacon tank with a label as to contents, the Judge had regard to that fact when identifying a notional penalty with respect to count one.
The failure to properly label the tank gave rise to count eight. That count, and its particulars were in the following terms:
On or about 26 July 2007, at Largs Bay in the said State, the defendant being the holder of an environmental authorisation, contravened a condition of the authorisation.
Contrary to Section 45(5) of the Environment Protection Act 1993.
This is a summary offence
Particulars
…
The business involved a prescribed activity of environmental significance per the Act and the defendant was authorised by a licence issued pursuant to section 36 of the Act to conduct the business, namely licence number EPA 2994 (“the licence”).
The licence had a number of conditions imposed on it pursuant to section 45 of the Act including condition 11 (67-102) which stated: The Licensee must mark each container of waste stored at the Premises to identify the nature of that waste.
The defendant contravened this licence condition in that it stored waste, namely used oil, in a container when that container was not marked to identify the nature of the waste.
The defendant contravened this licence condition in that it stored waste, namely used oil, a substance which has the potential to cause environmental harm, in a 20,000L concrete ‘Manacon’ tank, without that tank being contained within a bund contrary to the EPA guideline entitled ‘Bunding and Spill Management’ updated January 2004.
The Judge when fixing penalty in regard to count eight observed:[5]
The offending is related to the first offence. Mulherns failed to comply with condition 11 in that it had not marked the Manacon tank containing waste oil which subsequently was spilled onto the ground on the night of 26 July 2007, so as to identify the nature of the waste stored within the tank.
No explanation was offered for the breach of the condition. However, having regard to the facts with respect to the first offence, I have to conclude that the breach was deliberate and as a result of the decision to temporarily and unlawfully store waste oil in the unbunded Manacon tank.
[5] Circelli v Mulhern’s Waste Oil Removal P/L [2009] SAERDC 17 at [50] - [51].
The maximum penalty for this offence is $120,000.00. The Judge noted that the direct consequences of the offending in this case were not significant, as it was not the failure to mark the tank which resulted in the pollution. The Judge took into account the nature and seriousness of the charges, the nature of the condition and the fact of the offending in reaching the conclusion that it was appropriate to impose a penalty in the order of 40% of the maximum, discounting this penalty by 25% for the plea of guilty. A notional penalty of $36,000.00 was fixed.
The failure to provide a bund to the manacon tank gave rise to count nine, which was in the following terms:
On or about 26 July 2007, at Largs Bay in the said State, the defendant being the holder of an environmental authorisation, contravened a condition of the authorisation.
Contrary to Section 45(5) of the Environment Protection Act 1993.
This is a summary offence
Particulars
….
The licence had a number of conditions imposed on it pursuant to section 45 of the Act including condition 12 (67-103) which stated: The Licensee must store any substances that are not contained in the 6.8 megalitre tank, and which have the potential to cause environmental harm, in accordance with the EPA guideline entitled ‘Bunding and Spill Management’ updated January 2004.
When dealing with count nine, the failure to bund the tank, the Judge reasoned:[6]
This offending also relates to the first offence in that the condition required any tank within which waste oil was stored, to be bunded in accordance with the EPA guideline referred to in the condition.
Again, it appears that the offending was deliberate. No explanation was offered, but I note that steps have been taken since the offending to bund relevant areas.
The maximum penalty is $120,000. The consequences were particularly serious, as is evident by the charge of offending identified herein as the first offence.
[emphasis added]
[6] Circelli v Mulhern’s Waste Oil Removal P/L [2009] SAERDC 17 at [55] - [57].
Having regard to the nature and seriousness of the charge, the fact of the offending and that the offending was unlikely to occur again as bunding had been put in place, the Judge imposed a penalty of 75% of the maximum, further discounted for the plea of guilty, arriving at a notional penalty of $67,500.00.
Ultimately when fixing the total sentence of $200,000.00 with respect to counts one, eight and nine, the Judge observed:[7]
As I have indicated earlier, I would have imposed a penalty of $150,000 in respect of the 1^st offence, $36,000 for the 8^th offence and $67,500 for the 9^thoffence, making a total of $253,500 for the 3 offences. I would apply the principle of totality to reduce this amount to $200,000. In the exercise of the Court’s discretion under s 18A of the Criminal Law (Sentencing) Act I will impose a single penalty for the 3 offences in this group of offences, in the amount of $200,000.
[7] Circelli v Mulhern’s Waste Oil Removal P/L [2009] SAERDC 17 at [74].
On the appeal, it was in the context of counts one, eight and nine, that it was said that the Judge had doubly punished Mulherns for the same conduct. Counsel drew attention to the following observation of the High Court in Pearce:[8]
To the extent to which two offences of which an offender stands convicted contain common elements, it would be wrong to punish that offender twice for the commission of the elements that are common. No doubt that general principle must yield to any contrary legislative intention, but the punishment to be exacted should reflect what an offender has done; it should not be affected by the way in which the boundaries of particular offences are drawn. Often those boundaries will be drawn in a way that means that offences overlap. To punish an offender twice if conduct falls in that area of overlap would be to punish offenders according to the accidents of legislative history, rather than according to their just deserts.
[8] Pearce v The Queen (1998) 194 CLR 610 at [40].
The Judge, when dealing with the first count, made specific reference to the manacon tank being unmarked and unbunded:[9]
Mulherns had waste oil stored in a Manacon tank contrary to its licence. The tank was unmarked and unbunded. Given the absence of bunding, environmental damage was always likely if there was serious damage to the tank or interference with the outlet pipe regulatory mechanism.
Mulherns was aware of the potential for environmental damage to adjacent land as a result of any breach of a Manacon tank holding waste oil, in the absence of bunding. About 2 months prior to the offence, such an incident had occurred. That the director, Michael Mulhern, was well aware of the potential consequences of a significant discharge of oil from an unbunded Manacon tank, is evident from what he said to employees on that earlier occasion.
…
In summary, although the deliberate act which resulted in the pollution was not the defendant’s act, Mulherns was culpable in that it had deliberately placed waste oil in an unbunded tank.
…
The maximum penalty is $500,000. I have concluded that the offending whereby the defendant caused serious environmental harm to an area of approximately 1,100m², remediated at a cost of $181,655 using 650 tonnes of sand, and taking into account all mitigating factors, deserves a penalty of in the order of 40% of the maximum. I would discount the resulting dollar figure by 25% for a guilty plea. This exercise results in a proposed penalty of $150,000.
It is evident from these remarks that the Judge brought to account the unbunding and lack of marking in determining a notional penalty in respect of count one.
[9] Circelli v Mulhern’s Waste Oil Removal P/L [2009] SAERDC 17 at [20]-[21], [24], [26].

The above analysis demonstrates that the Judge punished Mulherns twice in respect of the unbunding and indirectly punished Mulherns twice with respect to the lack of marking. In my view, this was contrary to the approach outlined by the High Court in Pearce and was not in compliance with correct sentencing principle.
Matters in Mitigation
One of the major complaints on appeal involved a contention that the actions taken by Mulherns and the significant expenses incurred both in remediation of the damaged worksite and in the improvement of the general security in the area, represented significant matters in mitigation. It was said that although the Judge had some regard to these matters, it is evident from the observations referred to below that she did not treat these matters as significant mitigatory factors.
Counsel drew attention to the following observations of Kirby P in Camilleri’s Stock Feeds Pty Ltd v Environment Protection Authority:[10]
The appellant has co-operated fully with the State Pollution Control Commission and Environmental Protection Authority, both at the time of the commission of the offences and subsequently: State Pollution Control Commission v Metropolitan Collieries Ltd (Stein J, Land and Environment Court of New South Wales, 13 February 1992, unreported). The appellant has, since the offences, expended, and it will continue to expend, a considerable sum of capital on the design and installation of pollution control equipment as a result of consultation with the Environmental Protection Authority and its own consultants. This is a very important consideration in this area of the law: see Shoalhaven City Council v State Pollution Control Commission (1991) 52 A Crim R 291 at 296; State Pollution Control Commission v Metropolitan Collieries Ltd; State Pollution Control Commission v Wollondilly Shire Council (Stein J, Land and Environment Court of New South Wales, 5 May 1992, unreported).
[10] Camilleri’s Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 at 700 - 701.
A statement of Robert Richardson, the general manager for Mulherns, was received by the Judge at the time of sentencing. In that statement, the history and nature of Mulhern’s business was described, and information in regard to the company’s activities was outlined as were the details of the directors and staff of the company.
The statement of Mr Richardson attached the financial statements of Mulherns for the years ending 30 June 2006 and 30 June 2007. Those statements disclosed operating profits of $77,601.00 and $275,094.00 respectively. Although the 2008 financial statements had not been finalised, there had been a contraction in the industry generally and the revenue had decreased by approximately 25%.
Mr Richardson then described the company policy of Mulherns with respect to compliance with EPA requirements. He detailed the substantial amount spent in regard to remediation work arising from the offending conduct the subject of the charges. The cost of the remedial work was of the order of $180,000.00. He then detailed money spent since the offending to address the need for the better securing of waste material transported and held onsite. Mr Richardson outlined that between the two sites, Mulherns had spent approximately $900,000.00 since the offending conduct. This expenditure was associated with bunding, secure storage, site paving and instruments associated with better screening. There was also expenditure associated with the upgrading of site, laboratory and security. Mr Richardson was of the opinion that as a result of the expenditure, compliance would exceed relevant standards, and that risks associated with accidental or deliberate acts resulting in the spilling or release of materials, had been greatly decreased. Mr Richardson also outlined plans for the future, to ensure continued compliance.
Mr Richardson then described the other steps taken by Mulherns as a consequence of the offending conduct. In that respect he said:
The other effect that the main incident referred to in the Complaint has brought about and which I have personally been involved in is an increase in the implementation of guidelines and manuals to streamline and set in place appropriate work procedures. As a result of the incidents and at my direction we now have fortnightly meetings with the operations and processing staff and monthly meetings with our drivers and contractors. As part of the weekly meetings the employees are encouraged to actively participate in the operation of the business and are reminded of the licence conditions. In that regard copies of the licences are displayed at both sites and all employees are regularly told to keep themselves familiar with the terms and conditions of the licences.
We have also implemented a work procedures manual which governs all aspects of loading, sampling and dispatching of used oil and hydrocarbons.
The Judge in her remarks when fixing penalty described the Mulherns business, drawing on Mr Richardson’s statement:[11]
Mulherns has been in operation since 1979. It carries on business as a collector of waste oils. Generally the oils are collected from a customer’s premises using a vacuum pump truck and are then taken either to one of the defendant’s two premises or elsewhere for treatment. The customer pays a fee to Mulherns for the collection service. Mulherns on-sells treated used oil.
The directors of Mulherns are husband and wife: Mr Michael Mulhern and Ms Carol Mulhern. There are 19 full time and 1 part-time employees. In addition, Mulherns engage 3 franchisees/contractors full time. Sixteen vehicles are owned by Mulherns which are used to collect waste oil. Part of its business operations include the delivery of treated waste oils, to various purchasers in South Australia.
Financially, Mulherns has been operating at a healthy profit over recent years, but claims that revenue has recently decreased as a result of the global financial crisis.
[11] Circelli v Mulhern’s Waste Oil Removal P/L [2009] SAERDC 17 at [4] - [6].
The Judge then dealt with the appointment by Mulherns of Mr Richardson as general manager and in that respect observed:[12]
Since the offences, Mulherns has appointed a Mr Richardson as general manager (in August 2008). Mr Richardson is a senior environmental scientist and possesses significant experience in dealing with liquid waste treatment and disposal. He also had some knowledge of Mulherns’ operations, having initially been appointed as operations general manager in February 2008. Mr Richardson has taken steps to ensure that Mulherns has systems in place to enable it to comply, and to continue to comply, with its obligations under the environmental authorisations and the relevant legislation.
[12] Circelli v Mulhern’s Waste Oil Removal P/L [2009] SAERDC 17 at [7].
The Judge then discussed the steps taken by Mulherns as outlined above in Mr Richardson’s statement and concluded by way of general observation as follows:[13]
I have no doubt, based upon Mr Richardson’s statement, that the offences were a “wake-up call” to Mulherns, to take some necessary drastic action, in the interests of complying with its obligations and minimising the risk to the environment, itself and others.
However, I do not see the action and the significant expenses thereby incurred as mitigating factors when considering penalty, excepting that they evince an intention to comply with EPA licence obligations in the future. They indicate that Mulherns is now aware of its obligations and has been deterred from its previous casual approach to compliance with licence conditions and to minimising the risk of harm to itself and the environment.
[13] Circelli v Mulhern’s Waste Oil Removal P/L [2009] SAERDC 17 at [11] - [12].
In my view, the observations of Kirby P in Camilleri have application to the circumstances arising in the present proceeding. The conduct of Mulherns, both in its cooperation with the EPA and in its extensive expenditure on the remediation of the site in addition to the further substantial expenditure at the direction of Mr Richardson, represents a significant mitigatory factor. Not only does this conduct demonstrate that Mulherns became aware of its obligations, it demonstrates Mulhern’s determination to put things right. The expenditure of approximately $900,000.00 involved much more than compliance with EPA requirements. It was evidence from which the Court could infer that there was no need for any further personal deterrence and that Mulherns was determined to act responsibly and to expend the necessary moneys to ensure a secure site in the future. It is to be accepted that the Judge made reference to these matters, but it is clear from the tenor of her remarks that she did not treat them as significant factors in mitigation in the way described by Kirby P in Camilleri.
For these reasons it is necessary for the Court to consider afresh the appropriate penalty to be imposed in respect to counts one, eight and nine.
The Ongoing Offending – January 2007 to July 2007
As earlier observed, the Judge dealt separately with the second, third, fourth, fifth, sixth, seventh and tenth counts. Those counts related to similar offending conduct occurring on different occasions, and in particular, on different occasions to the incident the subject of counts one, eight and nine.
In respect of the second group of counts, the Judge drew on the agreed facts in her remarks.[14] The parties agreed that Mulherns had breached a condition of their licence in receiving wastewater from spray paint booths on 27 occasions between January and July 2007 and depositing it in their liquid waste pit. A total of 43,050 litres was received and Mulherns was paid $7,318.50. It was this offending that formed the basis of counts two, three and four.
[14] Circelli v Mulhern’s Waste Oil Removal P/L [2009] SAERDC 17 at [27] - [37].
Mulherns further breached its licence when it received unauthorised waste being wastewater containing stone cutting slurry on five occasions between January and July 2007. A total of 24,800 litres of this material was deposited into the liquid waste pit at Mulhern’s site. It was estimated that Mulherns received $5,000.00 to $8,000.00 for receiving this waste. This offending formed the basis for count five.
The offending conduct forming the basis of the sixth and seventh counts occurred when Mulherns received approximately 16,600 litres of stone cutting slurry from another business, also depositing this waste in Mulhern’s liquid waste pit.
It was agreed that in about January 2007, one of Mulhern’s directors had dug a pit at one of Mulhern’s sites and instructed employees to deposit liquid waste into the pit.
Mulherns had submitted that the materials deposited in the pit were “largely inert materials” and that no environmental damage was caused by storing the liquid waste in the pit. However, while no environmental damage was alleged, the depositing of unauthorised liquid wastes at the premises was a clear breach of the conditions of Mulhern’s licence.
It is instructive to note that the offence forming the basis of count 10 was Mulhern’s failure to ensure that one of its vacuum truck drivers was aware of Environment Protection Act licence conditions that related to his tasks and responsibilities as an employee of Mulherns.
The Judge took a very serious view of this group of offending and was right to do so:[15]
As I have already said, it is a privilege to hold a licence under the Environment Protection Act. That privilege carries with it certain obligations, in the interests of the protection of the environment. It is expected that those obligations, namely the conditions of the licence, be adhered to. In the interests of the community and the protection of the environment, it is vitally important that those conditions be adhered to by a licence holder. A deliberate transgression of a condition of a licence merits a significant penalty.
In this case, it is difficult to see any mitigating circumstances. The pit was dug by the person at the highest level of the company and persons, subject to direction by the company director, were instructed to collect the liquid waste and to deposit it into the pit. Periodically, the sludge was removed from the pit and taken elsewhere. The facts again show a cavalier attitude on the part of Mulherns towards its obligations.
Although I appreciate that Mulherns now has a more effective management regime in place than appears to have existed over the period of the offences, the Company must be shown that offending does not pay, and deterred from engaging in unlawful activity.
A message has to be sent to the community of environmental licence holders, in the interests of general deterrence, that deliberate breaches of condition are serious offences against the community. The general community is also entitled to know that conditions imposed on an environmental authorisation will be enforced and that breaches have consequences.
[15] Circelli v Mulhern’s Waste Oil Removal P/L [2009] SAERDC 17 at [39] - [42].
However, in the above remarks, the Judge did not have proper regard to the statement of Mr Richardson as to the steps taken to ensure that the offending of the type referred to in the second group of offences would not occur in the future. When this fact is considered in light of the other responsible steps taken by Mulherns, it was contended that it was clear that Mulherns had been personally deterred from further offending conduct. It was argued that this was a significant mitigatory factor overlooked by the Judge. I agree. In my view, the overlooking of this mitigatory factor involved an error of sentencing principle and calls for this Court to reconsider the appropriate penalty to be imposed for this group of offending.
Reconsideration of Penalty
It was open to and appropriate for the Judge to consider counts one, eight and nine as all part of the same incident and to impose the one penalty pursuant to section 18A of the Criminal Law (Sentencing) Act 1988 (SA) in respect to all of this offending. However, in my view, the penalty identified by the Judge was manifestly excessive. The explanation lies in the errors referred to above. In the circumstances, it was appropriate to make a reduction of one quarter on account of the pleas of guilty. I would fix the one penalty of $75,000.00 in respect of these three offences. In fixing this penalty, I have had regard to the whole of the offending conduct in respect of counts one, eight and nine and I have specifically avoided imposing any double punishment. I have also had regard, as a final step, to the principle of totality.
In respect of the second group of offending, it is to be recognised that this was serious, ongoing, deliberate offending. However, there was no environmental damage. In all the circumstances I consider it appropriate to fix a penalty of $70,000.00. In arriving at this penalty, I have made a reduction of one quarter, on account of the pleas of guilty. I have had regard to the whole of the offending the subject of the seven counts. I have had regard to the principle of totality.
In arriving at the above penalties, I have taken into account all of the factual background as well as the circumstances of the offending referred to earlier in these reasons. I have had regard to the circumstances of aggravation and mitigation arising from those matters.
In the course of the Judge’s remarks, reference was made to the possible inappropriateness of considering the principle of totality when determining monetary penalties. This issue was addressed by the New South Wales Court of Appeal in Camilleri and by Debelle J in Resourceco. Those decisions establish that it is appropriate to have regard to the principle of totality. Accordingly, I have done so.
Conclusion
The appeal with respect to penalty is allowed. In respect of counts one, eight and nine, pursuant to section 18A of the Sentencing Act, the one penalty is imposed, a fine of $75,000.00. In respect of counts two, three, four, five, six, seven and ten, the one penalty is imposed, a fine of $70,000.00. The total monetary penalty, as a consequence, is an amount of $145,000.00. Otherwise, the orders of the Judge of the Environment Resources and Development Court of South Australia remain.